VGTRK&#8217;s press center, located in the center of Moscow. Photo: VGTRK

[Via Satellite 12-30-2014] The Rostelecom board of directors has approved a new joint venture with the cable and satellite pay-TV producer All-Russia State Television and Radio Broadcasting Company (VGTRK). The joint venture merges Rostelecom’s subsidiary NKS-Media with VGTRK’s Digital Television.

To facilitate the merger, Digital Television will carry out an additional share issue by private subscription, with the proceeds sent to Rostelecom. Rostelecom will then acquire ordinary registered uncertified shares of Digital Television during its additional share issue and receive 25.33 percent of Digital Television’s voting shares. The company intends to pay for these shares using 100 percent of its equity interest in NKS-Media and approximately $4.4 million in cash. The value of Rostelecom’s contribution to the joint venture amounts to more than $17.5 million.

“We have considered a number of scenarios for the further development of our TV channels and have made the decision to consolidate them with VGTRK media assets, becoming a shareholder of the leading player on thematic pay-TV channels market. We believe they will generate greater value as part of a larger joint venture with VGTRK rather than attempting to develop our media business as a standalone entity. This will enable the combined company to obtain a much stronger position in the market, manage its costs more efficiently and enhance a leadership in quality of content,” said Sergey Kalugin, president of Rostelecom.